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As the voting starts at General Motors facilities on the tentative agreement between the automaker and its union-represented workers, there is some confusion about the loss of two annual bonuses that amount to $1,500.
But the perceived loss will be a gain in the long run with the addition of a cost-of-living adjustment and wage increases, said a person with the union who is familiar with the GM tentative agreement but not authorized to speak publicly about it.
The GM tentative agreement White Book shows that a $1,000 performance bonus that was paid in June of each year since 2020 has been deleted from the contract. Similarly, a quality bonus of $500 often paid in December has been removed. Those were replaced by the union winning back its COLA formula lost in 2009 and a 25% wage increase over the 4½-year contract.
But some union members have reached out to the Detroit Free Press saying losing that $1,500 annual bonus is a hit unless COLA consistently holds or rises.
Not true, said the UAW person, adding, the bonuses were paid in the past in place of general wage increases and COLA. Members will do much much better with COLA and wage gains.
The current U.S. inflation rate is 3.7% for the 12-month period leading up to September 2023, according to Bureau of Labor Statistics. Inflation rose 0.4% in September from August.
But for simple math, the union person used 2.5% as a conservative yearly rate of inflation. So if the agreement is ratified, by year-end the contract shows that the new base wage for a production worker is $36 an hour. So multiply the 2.5% inflation rate by $36 an hour base wage. It is 90 cents. Then multiply 90 cents by 2,080 hours worked in a year based on a 40-hour workweek. That equals a $1,872 increase in wages for the year, well above $1,500.
And as the wages go up, that will add up to more money at the end of each year than $1,500, the person explained.
The chances that there is no increase in inflation and therefore in the COLA is “extremely slim,” the person said.
For evidence, according to www.worlddata.info, the inflation rate for consumer prices in the United States over the past 62 years has moved between negative 0.4% and 13.5%. For 2022, an inflation rate of 8% was calculated. From 1960 to 2022, the average inflation rate was 3.8% per year. According to WorldData, the price increase was 903.96% meaning something that cost $100 dollars in 1960 costs $1,003.96 at the beginning of this year.
Meanwhile, voting at some GM facilities has started. Flint Assembly plant is expected to vote Thursday, Flint Engine voted earlier this week and rejected the tentative deal, as did Romulus Engine. Factory Zero in Detroit and Hamtramck voted yes on it. The UAW is working to set up a place on its website to report the overall vote at locals as they come in. Some other GM plants such as Fort Wayne Assembly and Bowling Green Assembly will not vote until next Tuesday.
The vote process is as follows: The membership votes, the UAW’s election committee then certifies the ballots and the results are shared with the local union leadership and then sent to the UAW International, where they are recorded and reported to the public. On May 12, 2021, the U.S. District Court for the Eastern District of Michigan appointed Neil Barofsky of Jenner & Block LLP as the independent monitor of the UAW. If Barofsky requests to review the voting, the UAW leadership would comply.
More:UAW President Shawn Fain urges GM members to ratify tentative agreement
More:Unifor members ratify deal with Stellantis, ending Detroit 3 bargaining in Canada
Contact Jamie L. LaReau: jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter. Become a subscriber.
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